Real Estate Secrets, Dangers and Dirty Tricks that Cost You Money. Exposed by 20 year Realtor and Author

zestimate

The ad was captivating. It grabbed your attention and pulled you in, but don’t fall for it.

There are several reasons people go to Zillow, but here is proof that you shouldn’t make any important decisions based on what you find there.

Buyers are looking for homes

Sellers are confirming the value for a list price

Buyers are confirming the value before making an offer

Folks are “checking out” a potential real estate agent

Pictures, maps, neighborhood info

The dirty low down:

Number 5 is easy: Zillow harvests photos and data from numerous sources and provides it for your viewing pleasure. Enjoy it. Even if the photos are not current, you aren’t going to make too big of a mistake just from looking at them.

Number 1 is also easy: Not everything you see on Zillow is actually available for sale. There are dozens of reasons why properties are shown when they aren’t for sale. This company exists solely to lure viewers and collect information to sell to real estate agents. The data doesn’t have to be accurate; it just has to be attractive.

Number 4 can be a real problem. It’s a problem for the buyers and sellers, and also for the real estate agents. I sell two or three times as much real estate as the average agent, but you can’t tell that from looking at Zillow. They say that I have not sold anything in the last 17 months. https://jimsweat.wordpress.com/2018/09/20/really-zillow-again/

Yes, I can go in and manually update it, but that doesn’t mean it will be accurate next week. Here today, gone tomorrow is reality with these guys.

They were happy to use my photos, my descriptions and marketing remarks on my listings they used as “bait” to attract potential buyer and seller leads, but when those homes sold, Zillow conveniently “forgot” to credit me with the sale.

Blog post January 16, 2015 titled Real Estate Misinformation and Extortion tells how after 20 years in real estate, Zillow showed me completing 2 (two) total transactions. Two. After I had been a full time licensed real estate professional for twenty years! I had owned a real estate company part of that time. I had obtained my ABR, CRS, GRI, CDPE, e-PRO and ILHM designations – many of which require a certain level of production to qualify. But the big gorilla of real estate information credited me with two sales!

My blog post Boom! Yes That Was My Head Exploding! from August 6, 2015 tells when I found out Trulia and Zillow wiped my slate, again. After over 20 years as a full-time licensed real estate professional, part of which I was broker/owner of a real estate company, Trulia credited me with 1 (one) total career sale and Zillow showed me having 2 (two) sales in my entire career!

You don’t have to make things up, they prove every day that danger lurks if you blindly follow.

The thing to remember is that Zillow exists purely to make money from real estate brokers. If they have decent information on the website, great. If not, it doesn’t matter as long as they can lure people there, collect the contact info, and sell them to an agent.

There are thousands of companies that do the same thing: provide real estate information for the sole purpose of collecting leads to sell to real estate agents. Zillow just happens to be the biggest, and therefore can do the most damage.

Zillow has some great ads: A wonderful mix of emotional heart-tugs and perceived factual data.

Too bad people make important life decisions based on the fake news and false information.

Millions of people go to this website every month. They’re looking at listings, checking values and enjoying pictures.

Let me warn you, again, DO NOT make any important decisions based on the information you find there!

This company exists solely to attract viewers and collect information to sell to real estate agents. The data doesn’t have to be good, it just has to be attractive.

Notice how many places on the screen grab offer me the opportunity to spend money with them: Advertise; Advertising; Promote Yourself on Zillow. Clickable links all over that page for one purpose only.

This week I noticed my Zillow profile says I have had no sales in the last 12 months. The last sale they show was 17 months ago. I periodically look at my profile to see if it is up to date, and rarely is it.

Strange, because Zillow has no problem pulling my photos (either that I personally took or paid a photographer for), my marketing remarks and the data I enter into the Multiple Listing System (MLS). They even show me as the listing agent on my listings during the listing period (that is the main thing I check when a property is listed).

So why do they have such a problem crediting me when the property sells? They have access to the information. Why is it a constant battle with them to get correct information? My theory is that I am not a willing victim to their money squeeze, so they punish me (and tens of thousands of other agents).

My blog post Boom! Yes That Was My Head Exploding! from August 6, 2015 tells when I found out Trulia and Zillow wiped my slate, again. After over 20 years as a full-time licensed real estate professional, part of which I was broker/owner of a real estate company, Trulia credited me with 1 (one) total career sale and Zillow showed me having 2 (two) sales in my entire career!

Blog post January 16, 2015 titled Real Estate Misinformation and Extortion details some back ground on these companies that don’t really care about accurate data, all they really want are eyeballs looking at their site.

Do not make any major decisions based on an online, automated home valuation. You could lose a lot of money. A lot.

How does a $60,000 loss on a $300,000 home sound to you? Ridiculous? Read on.

Of course you are going to look up the value before you make an offer on a home, or prior to selling your current place. Just remember, that number is almost guaranteed to be wrong.

If you make life-changing decisions based on bad information, then you’re jeopardizing your future.

How can I be so sure the information you get online isn’t correct? Because it is statistically unlikely, and most of the sites will even tell you so, in the fine print.

Does it matter which site you use? Not really. Some are better at guessing than others, but they all vary dramatically.

When determining value on a property I typically check ten different online valuation sites. Not because I think they “know” what the home is worth, but because the seller and potential buyers are checking these sites, and it’s better to know in advance what disinformation they are consuming.

Those values are all over the map!

For example, a home with a true market value of $300,000 might have automated valuations ranging from 225,000 to 375,000. That is a large margin of error!

What about the infamous Zillow Zestimate? This is the margin of error stated on their website as of July 26, 2018:

Nationwide, Zestimates are currently within 5% of the final sale price 52.9% of the time.

In the U.S. as a whole, Zestimates are currently within 10% of the final sale price 73.3% of the time.

Nationally, Zestimates are currently within 20% of the final sale price 85.8% of the time.

Let’s put this into real world numbers using the $300k actual value example.

Just over half of the time (52.9%) the Zestimate is within $15,000 (5%) of actual final sales price. That could be high or low, so a $30,000 swing from 285,000 to 315,000.

The Zestimate is within 10% on another 20.4% of homes. That means a $60,000 swing from 270,000 to 330,000. If the buyer believes the real value is 270,000 and the seller thinks it is 330,000… well it’s easy to see we now have a significant problem.

Another 12.5% of homes are within 20%. That produces a $120,000 range of value from 240,000 to 360,000! That is 40% of the actual value! You don’t want to make any decisions based on this information!

Zillow admits they are not even within 20% (high or low) on 14.2% of homes nationally.

Do you want to guess which group your Zestimate falls within? It’s a roll of the dice!

If you’re in the 52.9% group you could lose $15,000.

If you’re in the 20.4% group you could lose $30,000.

If you’re in the 12.5% group you could lose $60,000.

If you’re in the 14.2% group you could lose even more than that!

The last two groups comprise 26.7% of properties. That means you have a greater than 1 in 4 chance oflosing $60,000 or more if you base your buying or selling decision on the information you obtained from the big gorilla of real estate data online.

This is a multi-billion dollar company that draws millions of people to the website each and every month. And I have the nerve to warn you against believing what you see in black and white on that website? Yes. That website and dozens of others. Pay attention.

The actual Zestimate, not the range of possibility, the actual published number on my personal residence has gone up and down over the last year $59,000. That is absurd. Home values don’t rise and fall with the wind, like the stock market.

Side note: Facebook stock is down 20% today. Your home doesn’t go on a roller coaster ride every month.

These robot valuations use raw sales data available from public records but they have a huge disadvantage: They have never been inside your home.

They don’t know if the flooring, kitchen cabinets and roof all need replaced, or if they were just completely updated. They can’t see the view; they don’t know if the comparative sales were well cared for or not; they can’t tell if the home next door is an eyesore or worse; they can’t hear the traffic from the highway that decreased the selling price on three of the comparable sales they are using.

The bottom line is you need a trustworthy professional to give you good information.

Contact a full-time, experienced and knowledgeable professional whom you trust to give you good advice so you can make the best decision for your family.

This is why the public needs to be careful of the sources they use to make important decisions!

Things that make your head explode!

The DMV at Secretary of State office; Trulia; Zillow; getting “help” from a government agency.

Let’s just grab one of these, and let ‘er rip!

(For the record, I wanted to type the whole thing in BOLD CAPS!!)

I just sent Trulia a message not to renew my PRO subscription. And followed up with a phone call, because they plan on billing me again in just two days, and I want to make sure it doesn’t happen. So, what do they try to do?

Sell me advertising!

I have had profiles on Zillow and Trulia for @ 9 years, have been a full-time Realtor for over 20 years, and still Trulia only credits me with one sale.

Ever.

Total career high of… one!

Zillow was hardly any better: they had me credited with a career high of two (2) sales! So I started manually entering sales into Zillow. You would be shocked at the number of homes that are not in the Zillow system at all.

Our previous home: 100 years old, 2 blocks to downtown, 3 blocks to city hall and neither Zillow nor Trulia have it in the database as a home I can claim a sale on. Really?

I sort of understand some of the properties I sold in gated waterfront communities that they may not be able to access easily. Wait! Those homes are all deeded properties readily available on the county website, so why can these data-mining behemoths not locate the information?

Not even a zestimate for 412 Michigan Ave in South Haven, Michigan. Interesting. It’s not that zestimates have any bearing on reality, it is that so many people THINK the information they are getting online is trustworthy, and it is NOT!

So, today the Trulia rep told me what I needed to do is pay for advertising in my chosen zip codes, and buyers and sellers will then see my profile. I explained that my profile makes it look as if I am a useless slug that can’t sell anything (including my own house!) and I am NOT interested in paying them to send people to my profile for proof that I am worthless after 20 years in the business!

Boom!

How many times will my head explode and I continue on?!!?

Zillow bought Trulia this year, so they now are merging their faulty databases. The rep today said that I will likely see issues with my profile during the merger.

Not likely to get any worse for me, is it?

She confirmed My Florida Regional MLS feeds into Trulia, so the information should be automatically updated. That was after I explained that our MLS goes from Fort Meyers, north to Tampa, east through Kissimmee to the Atlantic Ocean. It is a big MLS! Not the Podunk system she assumed wasn’t feeding into Trulia.

So why, after 9 years, can’t they get it right? Or even close? They could credit me with a couple hundred of my sales and I probably would never even look to see if they were all there. Maybe even 100 would keep me from looking.

But only ONE?!?! I might notice that!

Several times through the years Trulia has said they will fix the feed to my profile. And I have even added some of my sales manually. But, time and time again, this is what I get. The rep said she has hundreds of Realtors in Florida who don’t have issues with their feed.

What makes me so special?

My recent sales range from a $90,000 condo downtown to a $3 Million bay front manse on an idyllic Florida island. I have worked the listing side, the buyer side, and even one with both sides. Trulia even sent me updates on my listings (that sold within days at full price or higher with multiple offers). How can they not at least have the properties they were emailing me about!?!?

Don’t get me started on the agent ratings, recommendations and testimonials! That is a whole other ball of… wax!

So here is my open letter to Trulia, and it will suffice if someone from Zillow would also like to take a look:

I do not want to renew my PRO subscription, that I have had for eight months. I have not gotten any leads from it. The only branding I will get from this is negative! I have had profiles on Zillow and Trulia for @ 9 years, have been a full-time Realtor for over 20 years, and still Trulia only credits me with one sale.

I have recommendations, but no ratings because the customers filled them out before ratings were a feature. I can’t remember if it is Trulia or Zillow, but at least one told me I have the old version of profile, and if I move to the new one I will lose the testimonials that I already have. Great.

Trulia was more useful to me when the blog and Q&A were being utilized. Now, I just don’t see the value of it.

Trulia-Zillow, surely you are working on cross-populating ratings and testimonials, right? Oh well, I’m not paying to see how it turns out.

Please let me know what additional information you need to set up my NON-renewal request.

Rant over. I feel better. Hopefully you are now better informed, and this is a win/win!